Assets law aims for more than just gangs

A new law targeting the assets of druglords and gangs could be applied to crimes ranging from benefit fraud to tax evasion, raising the prospect that thousands could be caught by it.

The Government's proposed civil forfeiture law includes sweeping new powers to confiscate the proceeds of crime, including the ability to seize assets even when there has been no conviction.

It switches the burden of proof, so the suspect would have to show that assets such as money and property going back seven years were legally obtained.

Justice Minister Phil Goff says the law is aimed at organised crime and gang bosses "who keep themselves at arm's length from offending but take the profit".

But Weekend Herald inquiries have found legal and academic unease about a move to a lesser standard of proof, and the law's potential scope.

The threshold for confiscation is as low as $30,000 in unexplained assets.

Acting national crime manager Inspector Bill Peoples yesterday made no apologies for the broad sweep of the legislation.

"We wouldn't want to restrict it to drug crime - there are other forms of serious crime, particularly if a person has defrauded the state in a serious way."

The law will replace the 1991 Proceeds of Crimes Act, which has recovered less than $10 million and which police regard as as too difficult to enforce.

They believe the new measure could recover $20 million a year.

A specialist asset recovery team, expected to include police and forensic accountants, will pursue cases.

The unit will apply to the High Court to freeze assets where it can show reasonable grounds for believing a suspect has benefited from criminal activity.

Assets can then be confiscated on a civil standard of proof - the balance of probabilities - rather than the "beyond reasonable doubt" requirement of criminal law.

The proposal is modelled on laws in New South Wales and Queensland, which lawyers say have caused "appalling" miscarriages of justice.

"It's as draconian in practice as it sounds in principle," said Sydney criminal lawyer Lesly Randle.

Assets could be frozen without a suspect's knowledge, and could not then be used to pay for a defence.

Those who challenged a confiscation order or applied to have property excluded risked losing everything.

"The victims in this are generally the wives and kids who didn't know what the husband was up to but lose the house and car."

Auckland University senior law lecturer Scott Optican said the proposal challenged age-old justice principles, including the right not to incriminate yourself and being innocent until proven guilty.

Criminal Bar Association president Peter Winter said the proposal was

"politically motivated election year stuff; it's morally and intellectually bankrupt".

Law Society criminal law convenor Phillip Morgan, QC, said it was a dangerous extension of "the almighty power of the state".

"We know from experience that while these laws are supposed to attack gangs, they are not used to attack gangs. They are used to attack ordinary members of the public who are easier to get."

But Inspector Peoples said police would be able to target those who distanced themselves from crime but benefited from the proceeds.

"Picture somebody driving around in a great big flash car, who lives in a million-dollar mansion, hasn't filed a tax return in 10 years and has no visible means of income.

"Police ... may have a high level of information but not enough to prosecute on specific grounds.

"Now we will be able to go to the court and put a case to convince a judge that the person is involved in serious crime. Then it becomes their burden to explain away their assets."

A Justice Department official promised "checks and balances" in the draft legislation to ensure suspects had adequate legal representation and could have access to frozen funds "for particular purposes".

•National's law and order spokesman, Tony Ryall, says the new measure is too moderate. He backs Western Australian law, which allows police to freeze assets without having to show reasonable grounds.